What would you do with £10k, £20k, £50k, £100k, £500k

jamesd

First for me would be investing in not having an income tax bill any more, a particularly interesting thought for those not close to the pension access age of 55. How? By buying venture capital trusts. VCTs are a form of collective investment that comes with 30% initial tax relief, capped at the tax due in the year of purchase, which has to be repaid if you sell within five years. So you can invest, hold for five years then start to recycle the same money. When you have enough accumulated to cover your tax bills you can go tax free. There are many to choose from, with varying risk levels, from outrageously speculative to roughly comparable with the main UK stock market. Most gains tend to come via tax exempt dividends (no dividend allowance used) and they are exempt from capital gains tax. Pensions are great but if you're 25 today you can recycle at least five times to get 150% tax relief, not just 20% or 40%. Plus the tax exempt dividends and capital gains.

I see no point in paying off a mortgage when even a lowish risk P2P lending mixture can pay 7% and 10% or more is available, both after allowing for bad debt and with many P2P options now available in an ISA. I have about ten times my interest only mortgage in investments and could pay it off easily if I wanted, but it would make me worse off financially, so I don't.

£100,000 is enough to live without means tested benefits in much of the UK at the moment: either £7,000 a year with the mixture from earlier or £10,000 with more ups and downs. This probably won't be true for more than a few years but it works today.

With £500,000 people in most of the country could afford to retire. The UK initial safe withdrawal rate for a 40 year retirement is 5.5%, usually increasing wth inflation, if the Guyton-Klinger drawdown rules are used. A safe withdrawal rate is one that wouldn't have failed to pay the specified income for the specified number of years if retirement had started even in the worst starting year in the last century or so, which was 1936. With £500,000 that's £27,500 a year and after a while all of it will become tax free as you use your ISA allowance as well as the personal savings allowance and starting rate for savings and investment interest. State pension on top, eventually, and knowing that can let you take more or retire earlier.

Personal pensions are an excellent deal if close to age 55. At basic rate pay in, have 25% added to give basic rate relief then at or after 55 you can take out 25% as a tax free lump sum (for other investments... ) and leave the rest for actual retirement. £100,000 in, £125,000 with tax relief, take out £31,250 tax free for reinvesting inside ISAs and leave the remaining £93,750 for later.

fatrab

If I had those sums of money VS if I had those sums of money to blow:


£10k - Pay off credit card & loan, keep £2000 spare VS by my wife a new car
£20k - Pay off my car Hire Purchase VS build a 2 car garage in the back garden
£50k - Pay off all non-mortgage debt & put balance to mortgage VS buy a small holiday home with rental income opportunity
£100k - Pay off mortgage and semi-retire VS invest in property
£500k - Walk out of work immediately, go home, put feet up, have a cuppa and decide where I'm flying off to first.....

chockydavid1983

Martinslovechild wrote: »

500k - Invest the cash in a non-ISA investment account. Keep £15K back for a nice holiday and a new CD player.

Surely you wouldn't need £500k before you'd consider a new CD player? ;-)

talexuser

chockydavid1983 wrote: »

Surely you wouldn't need £500k before you'd consider a new CD player? ;-)

https://www.burmester.de/en/home-audio/reference-line/069-cd-player.html

starting at £36000 :eek:

justme111

fatrab wrote: »

If I had those sums of money VS if I had those sums of money to blow:


£10k - Pay off credit card & loan, keep £2000 spare VS by my wife a new car
£20k - Pay off my car Hire Purchase VS build a 2 car garage in the back garden
£50k - Pay off all non-mortgage debt & put balance to mortgage VS buy a small holiday home with rental income opportunity
£100k - Pay off mortgage and semi-retire VS invest in property
£500k - Walk out of work immediately, go home, put feet up, have a cuppa and decide where I'm flying off to first.....

the very point is that it is for you to decide whether you had that money "to blow".

jimjames

Marky123 wrote: »

May I ask, those saying they would invest 100k. How would you invest it. Even 3 year Fixed Rate Savings aren’t that great. Cheers.

Investing isn't using savings accounts, it would be putting the money into share based stock market funds or directly into shares that should rise above inflation over the long term but can fluctuate in value over the short term.

You can read more here https://www.monevator.com

fatrab

justme111 wrote: »

the very point is that it is for you to decide whether you had that money "to blow".

Then I would go with my first choices. I'd rather be debt free than throw those sums of money away.


£100k+ I'd like to think some sort of investment/return possibility would be an option but below that I'd concentrate on my poor historical debts.

thenewcomer

invest, invest, invest.
at the same time, improve my lifestyle. improve, improve, improve.

snappyfish

thenewcomer wrote: »

invest, invest, invest.
at the same time, improve my lifestyle. improve, improve, improve.

My thoughts exactly, most seem to want to spend and spend more.

That is a bad lifestyle, find happiness outside of money. So invest to give yourself more time if you can. Dont blow it on trashy holidays and better cars pointless.

Zero_Sum

£10k nice holiday & new car
£20k above and probably pay for a wedding
£50k above & become mortgage neutral & invest a bit
£100k above & possibly move house
£500k above & go part time at work